The Nature of Business Ethics

Ethics is different with morality, morality is system of rules of what is right or wrong and to
behave accordingly. While, the dictionary stated that ethics is the study of morality.
Therefore, ethics is more like an investigation, and morality is the subject matter that ethics
investigate.
Morality is divided into two standards: moral standards and nonmoral standards. Moral
standards is is the guideline or methodology to determine whether the kinds of actions
believed to be morally right and wrong. While, nonmoral standards is the standards by which
we judge what is right or wrong in a nonmoral way.
Ethics is the discipline that scrutinize the moral standard of the society in order to evaluate
their implications for ones life. Ethics is not the only one discipline that study about
morality. Other disciplines such as anthropology, sociology, and psychology also learn about
moratility. However, those other disciplines have different approach for studying morality.
While, ethics is a normative study of morality, other discipline engage in a decriptive/positive
study of morality.
Business ethics is a study of moral right and wrong that focuses on business institutions,
organizations, and behaviour. There are three different kinds of issues level that business
ethics investigate: systemic, corporate, and individual issues. Systemic issues deal with
economic, political, legal and other related systems within which production and distribution
activities are carried out. Questions related to the morality of capitalism, regulation of
business etc. fall into this level. Corporate level issues deal with actions of corporate
concerns or corporate citizens. Individual levels issues deal with every individual working in
a business firm and it can include customers/consumers.
Argument Against Business Ethics
1. In perfectly competitive free markets, The pursuit of profit will by itself ensure social
responsible behavior
2. As a loyal agent of the firm, business managers should only pursue the interest of
their firms and should ignore ethical considerations.
3. To be ethical, it is enough for businesspeople to follow the law. If it is legal, then it is
ethical.
Ethical Issues in Business
The rapid development of technology emerge a lot of new ethical issues, especially related
with the privacy. Computers enable us to collect detailed information on divisuals on a
massive scale. Therefore, it could vioalate our right to privacy, which is the right to prohibit
others from knowing things about us that are private.
Many of the big issues in business ethics today are related to the globalization. Multinational
corporation play a crucial role in the process of globalization. Basically, globalization has
brought a lot of benefit to the world, since it enable nation to produce and export those goods

and services that they can produce most efficiently and then trade for what they do not make.
But, globalization also has been blamed for inflicting significant harm to the world, since
globalization has increased the inequality between nations.
Moral Reasoning
Moral reasoning is the process by which actions are judged with reference to moral
standards. Moral reasoning always involve three components: 1. An understanding of our
moral standard and what they are require, prohibit, value, or condemn; 2. Evidence about
whether a particular person, policy, institution, or behavior has the features that hese moral
standards require , prohibit, value or condemn; 3. A conclusion or moral judgement that the
person, policy, institution, or behavior is prohibited or required, right or wrong, just and
unjust, and so on.
The moral psychologist named James Rest propose four main processes precede ethical
action: 1. Recognizing that we are faced with an ethical issue; 2. Making a judgement about
what the ethical course of action is; 3. Forming an intention to do or not do what we judge is
right; 4. Carrying out or acting on the intention we have made
The Nature of Accounting
For financial markets to work well, stock analysts and investors need to get a true picture
of a company. The very notion of a true picture, however, presents some problems, for
there are any number of ways to look at the economic status of an organization, and in reality
several pictures of a company can be developed. Often, the picture an accountant develops
may serve the interest of the party who hires the accountant more than other need -to - know
parties.
Accounting is developing information that is going to be used. If the use of the information is
benign and the information is truthful, no ethical problems arise. But if the information
persuades people to act in one way or other, and their action either benefits or harms the
persons giving or getting the information, this information.
The accounting profession was developed to give a true and accurate picture of the fi nancial
affairs of organizations. That picture is important to a variety of constituencies. The creation
of inaccurate pictures used to exploit those with a legitimate right to know the true picture is
equivalent to the unethical behavior of lying. That constitutes a distortion of the accountant
s true function. Such distortions then lead to regulations and mandated best practices.
Why Study Ethics?
1. The study of ethics can help the individual sort out these complex issues by seeing
what principles operate in those cases
2. Ethical reasoning can provide insights into how to adjudicate between confl icting
principles and can show why certain courses of action are more desirable than others
3. Individuals may hold some inadequate beliefs or cling to inadequate values.

References:
1. Velasquez, M. G. (2012). Business Ethics: Concepts and Cases. Seventh
edition. Pearson Prentice Hall.
2. Duska, R., Duska, B.S., and Ragatz (2011). Accounting Ethics. Second
Edition. Wiley-Blackwell